The Board of Directors as local government in the COVID-19 pandemic crisis.
By Edward J. Zelmanski, Esq.
We received the first round of questions arising in the face of the current COVID-19 Virus pandemic. Those questions tended to be of the form “Must the Board of Directors do what we cannot do?” These questions typically pertain to the holding of annual meetings required to be scheduled at a given time according to the governing documents of the Association or the holding of regular board meetings with Board Members in attendance. The answers tended to be that you may postpone those meetings or in some fashion conduct business electronically, being guided by the provisions of your governing documents and the Michigan Non-Profit Corporations Act.
It is important to recognize that as members of your Board of Directors you continue to be the local government for your community and you need to continue governing your community during these times with the shutdown or sheltering in place that has been ordered. There is no one else ready to step in and perform these activities. You should continue working with your professional community managers during this time. Managers may be unable to provide the guidance necessary to continue the proper governance of your community. Fortunately, we are part of the great American tradition, part of the culture that highly values invention and innovation. This time of crisis is one that calls upon you to lean on that tradition and recognize that this country’s ability to be innovative provides us with an invaluable strength during these times. Common sense and practicality are premium attributes during the changing face of the crisis.
Whatever form of dialogue the Board Members might use now, this is the time for a review of the responsibilities that your Association regularly discharges in its governance. After doing that, identify those activities that are essential to the continued operation of your Association and plan to continue those and defer the performance of nonessential activities. These will vary on a case-by-case basis for each community. A common sense approach to this would readily provide you with answers exercised in the reasonable business judgment of your Board under this declared emergency.
The powers vested in the Board of Directors are contained within the Bylaws for your Association. These powers have not been abolished nor have they been particularly expanded by the addition of new powers due to this pandemic. It is commonplace that the powers and duties of the Board of Directors in your Community are set forth in a separate article within your Bylaws. Now is a good time to review those so that you are fully familiar with the stated requirements of your governance duties which will typically conclude with a statement similar to the following: “The Board may, in general, enter into any kind of activity to make and perform any contract, or to exercise all powers necessary, incidental or convenient to the administration, management, maintenance, repair, replacement and operation of the Condominium and to the accomplishment of any of the purposes thereof not forbidden and with all powers conferred upon non-profit corporations by the laws of the State of Michigan.”
As Board Members, you are the backbone of the governance of your Community and your diligence, common sense and inventiveness are at particularly high premium now. You are encouraged to go forward with the knowledge and confidence that we have all been through tough times before and your continuing to function as the governing backbone of the Community is an important part of seeing you and all you care for through!
Edward J. Zelmanski is a partner with the firm Zelmanski, Danner & Fioritto, PLLC. After graduating from the University of Michigan in 1976, he earned his Juris Doctorate from the University of Detroit School of Law and has been a member of the Michigan Bar since 1979. He is a Michigan Master Lawyer and a member of the Real Estate Section of the Michigan Bar Association. He has a broad range of experience in real estate and community association matters, including the review, interpretation, enforcement and amendment of community association governing documents, as well as providing counseling and problem solving for community association boards and members. Mr. Zelmanski has experience with state and federal real estate litigation, foreclosure proceedings, real estate title and boundary disputes, as well as disputes with real estate developers and contractors. He has defended community associations in civil rights disputes and has assisted community associations and individual clients with bankruptcies, probate matters and class actions. He has contributed to the amendment of the Michigan Condominium Act, has published materials on real estate subjects and has lectured on real estate topics at Wayne State University and the University of Detroit Mercy School of Law. He has trained dozens of attorneys in law school clinics. Mr. Zelmanski has also presented lectures on community association topics for the Real Property Section of the Michigan State Bar, Community Association Institute, United Condominium Owners of Michigan, Lorman Education Services and for private community management classes.
Mr. Zelmanski joined the Firm in 1997. He has also provided pro bono services to the elderly, church groups, and the Veterans of Foreign Wars. He enjoys spending time with his family and has a myriad of other outside interests, including music, literature, cross-cultural studies, hiking, and swimming, in addition to being an avid baseball and football fan.